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Kmart Corp. v. Kroger Co.

United States District Court, Fifth Circuit

December 18, 2013

KMART CORPORATION, Plaintiff,
v.
THE KROGER CO.; E & A SOUTHEAST LIMITED PARTNERSHIP; FULTON IMPROVEMENTS, LLC; and KANSAS CITY SOUTHERN RAIL WAY COMPANY, Defendants.

MEMORANDUM OPINION DENYING PLAINTIFF'S MOTIONS FOR LEAVE TO FILE AMENDED REPORTS OF PLAINTIFF'S EXPERT, JOHN R. KREWSON

GLEN H. DAVIDSON, Senior District Judge.

Presently before the Court are two motions filed by Plaintiff Kmart Corporation: a motion to appeal [227] the United States Magistrate Judge's denial of its motion for leave to file the proposed amended report of its engineering expert, John R. Krewson, as well as a motion for leave [271] to file the newly proposed amended Krewson report.[1] Upon due consideration, the Court finds that both motions are not well taken and should be denied.

A. Factual and Procedural Background

From the evening of May 1, 2010 until the early morning hours of May 2, 2010, heavy rain pelted the Corinth, Mississippi area, causing nearby Elam Creek to flood. On May 2, 2011, Plaintiff Kmart Corporation ("Kmart") filed this suit to recover for flood damage sustained by its Corinth store. Kmart brings this action against Defendants The Kroger Co. ("Kroger"); E & A Southeast Limited Partnership; Fulton Improvements, LLC; and Kansas City Southern Railway Company.[2] In its amended complaint, Kmart alleges that due to Defendants' acts and omissions, the flood water rose and flowed forcefully into the back of the Corinth Kmart store, causing extensive damage to the store. The Corinth Kmart store was closed for repairs from the time of the May 2010 flood until February 2011, when the store reopened for business. Kmart alleges in its amended complaint that on April 27, 2011 its Corinth store incurred additional costs to prevent subsequent damage from another anticipated flood event.

In the weeks following the flood, Kmart retained an expert, John R. Krewson, to assist with preparing its case. Accordingly, Krewson began his investigation, utilizing a computer program to discern the impact of the flood waters on the Kmart store. On September 20, 2012, Krewson prepared his initial report, wherein he opined that flood water and debris had forcefully rushed into the Kmart store, because the neighboring Kroger store was partially located over a regulatory floodway. On May 22, 2013, Defendants deposed Krewson. During the deposition, Defendants questioned Krewson about a discrepancy among water-flow rates used in one of the three computer runs he had conducted. Krewson recognized for the first time that his numbers were wrong, and consequently, Kmart realized for the first time that Krewson's opinions in his initial report were flawed.

Thus, on July 25, 2013, Kmart filed its motion for leave to file a proposed amended Krewson report. In that proposed report, Krewson restates his opinion that the presence of the Kroger store caused or contributed to the flood damages sustained by the Kmart store, but recalculates the estimated water level. The difference in the water level alters Kmart's entire theory of the case. Krewson opines that if the Kroger store had not been located partially in the regulatory floodway, Kmart would have been exposed to standing whatnot rushing, flowing water and debris as he had originally thought. Krewson's July 23, 2013 proposed amended report also presents a new theory of liability that potentially impacts Defendant Kansas City Southern Railway Company.

On August 21, 2013, the United States Magistrate Judge entered an Order [213] denying Kmart's motion for leave to file the proposed amended Krewson report, finding that Kmart failed to show good cause to modify the scheduling order and allow the submission of the late report. On August 27, 2013, the undersigned entered an Order denying Kmart's alternative request to continue the trial date. Subsequently, Kmart filed the present motion to appeal [227] the Magistrate Judge's denial of leave. Defendants filed responses to the motion to appeal.

On September 27, 2013, the undersigned entered an Order [243] stating that the Court would consider a limited amendment of only mathematical errors to the Krewson report. Kmart filed another motion for leave 271] to file a newly proposed amended Krewson report and attached the same for the Court's consideration. Defendants filed responses, and Kmart filed a reply. The briefing on these matters was complete on November 18, 2013.

B. Analysis and Discussion

Due to the complexity of the issues presented, the Court will first address Kmart's motion to appeal the Magistrate Judge's denial of Kmart's request to submit the first amended Krewson report and will then address the issues presented by the newly proposed amended Krewson report.

Kmart's Motion to Appeal Magistrate Judge's Denial of Kmart's Motion for Leave to File Proposed Amended Krewson Report

When a party files objections to a Magistrate Judge's Order, the Court must make a de novo determination of those portions of the Order to which objection is made. Habets v. Waste Mgmt., Inc., 363 F.3d 378, 381 (5th Cir. 2004). The Magistrate Judge's order may only be overturned if it is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1).

When a party seeks to modify a scheduling order, the request should only be granted if the party shows "good cause" for the proposed modification. FED R. CIV. P. 16(b)(4). The Fifth Circuit has "interpreted Rule 16(b)(4)'s good cause' standard to require the movant to show that the deadlines cannot reasonably be met despite the diligence ofthe party needing the extension.'" Puig v. Citibank, N.A., 514 F.App'x 483, 487-88 (5th Cir. 2013)(quoting S & W Enters., L.L.C. v. Southtrust Bank of Ala. N.A., 315 F.3d 533, 535 (5th Cir. 2003) (in turn quoting 6A CHARLES ALAN WRlGHT et al., FEDERAL PRACTICE AND PROCEDURE § 1522.1 (2d ed. 1990))). With all the foregoing in mind, the Court turns to the issues raised in Kmart's motion for leave to file the proposed amended report.

The Magistrate Judge denied Kmart's motion for leave to file the proposed amended Krewson report based on the Magistrate Judge's analysis of four factors: "(1) the explanation for the failure to [submit a complete report on time]; (2) the importance of the testimony; (3) potential prejudice in allowing the testimony; and (4) the availability of a continuance to cure such prejudice." See Reliance Ins. Co. v. La. Land and Exploration Co., 110 F.3d 253, 257 (5th Cir. 1997) (citing Geiserman v. MacDonald, 893 F.2d 787, 791 (5th Cir. 1990)). In analyzing these four factors, the Magistrate Judge found that Kmart failed to show good cause for the proposed submission. The Magistrate Judge maintained in particular that ...


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